You find the cell phone of your dreams, and after mulling over the cost, you're eager to buy. You walk up to the counter, fork over your debit card and begin peeling off the protective plastic--that baby is officially yours. But before you even have a chance to check out the games on your new phone, the sales guy hits you with the question every cell phone user dreads: "Would you like insurance for your phone?"

After shelling out a hundred bucks for a new phone, it may seem silly not pay a few dollars per month to insure it. But is cell phone insurance really worth it?

Consumers Reports doesn't think so, and a number of consumer advocate groups agree. And here's why.

It isn't uncommon for a cell phone insurance deductible to top $50 (yes, most cell phone insurance policies carry a deductible), and though companies claim the replacement phone will be exactly the same or similar to the damaged phone, several companies provide replacements that are "refurbished"--a dirty little euphemism for a far less flattering word: used.

Add to that the high cost and cell phone insurance becomes an even worse deal. While $4.99 per month may not seem like much, using it to insure a $100 phone is equal to shelling out 5% of the phone's value each month. If a consumer paid that same rate for car insurance, he would pay $1,500 per month to insure a $30,000 car--not exactly a bargain.

But cell phone insurance isn't always a rip off. Wealthy business executive types with high-end PDAs and Blackberrys worth $400 or $500 would be foolish not to protect their gadgets with insurance. They could easily lose it while house hunting in Beverly Hills, drop it in the pool at the Bulgari Hotel in Milan or accidentally back over it with the new Ferrari--it's a dangerous world out there. Besides, someone who has enough dough for a fancy phone can afford to fork over a little extra each month.

For the rest of us peons with run-of-the-mill cell phones, an insurance policy is a ridiculous waste of money. Why not buy insurance for tennis shoes and wrist watches, too? Read more:

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